A fresh idea that’s doing well (and doing good)

Their Harvest: Cofounders Mike Winik and Scott Reich inspect the OurHarvest wares at a Long Island pickup location.

August 4, 2016

By GREGORY ZELLER //

Ten-thousand donated meals, three boroughs and two ousted competitors later, OurHarvest is still talking fresh.

Seems it’s always growing season at the 2014 Hicksville startup, which bills itself as “New York’s online farm” and mashes business models – part farmer’s co-op, part home-delivery service – into a winning farm-to-table formula with tasty social benefits.

Chief among those benefits: OurHarvest donates one complete meal to a local food pantry for every order over $25, and this summer will surpass 10,000 total donations – a testament to the startup’s solid growth and the “conscientious capitalist” mindset of cofounders Mike Winik and Scott Reich.

Noticing “issues along the food-supply chain,” the entrepreneurs left cushy corporate posts – Winik was an investment banker, Reich a corporate attorney – to launch OurHarvest.

“We consider ourselves socially conscious entrepreneurs,” Winik noted. “We always wanted to do something that had more of a social impact.”

Their idea: a dynamic business model that gets the freshest products to customers at the lowest prices, while generating steady business for regional producers and simultaneously assisting community food banks.

“An individual shopping at a grocery store is getting food that isn’t that fresh and, if it’s a high-quality store, is very expensive,” Winik said. “And you don’t see too many people dropping out of Harvard Business School to become farmers.

“So farmers are struggling and consumers are paying very high prices,” he added. “Something isn’t adding up in the system.”

A chief culprit, according to the OurHarvest owners, is a supply chain ripe with middlemen distributors. Their solution: eliminate not just the middlemen but the retailer at the other end by servicing customers directly through online ordering portals and various delivery methods, ranging from multiple pickup locations across Long Island to home delivery in the boroughs.

“Since we go direct to the farmer, we can pay them a higher percentage of the retail price, so they’re winning,” Winik told Innovate LI. “And we can still give the customer a more affordable price point than a typical fresh-focus or organics store.

“It keeps it all in the communities we serve.”

The model requires very little overhead, with operations centered out of a small warehouse/distribution center in Hicksville and “almost no product loss,” Winik noted.

“We’re basically a grocery store with no infrastructure,” he said. “And the product is so fresh. Food you pick up on Monday was harvested on Sunday. There’s virtually no spoilage, so customers are also getting more delicious, higher-quality food.”

The low overhead has allowed the company to grow quickly. Now boasting 12 full-time employees and three delivery vehicles – two large refrigerated box trucks and an unrefrigerated cargo van – OurHarvest has grown from five original farm partners to more than 80 from across the state, while also forming alliances with numerous private vendors offering a variety of non-farm products.

The company has also spread its service area, growing from three original pickup locations in Port Washington, Roslyn and Plainview to nine Long Island locations total, while adding home deliveries in Brooklyn and Manhattan.

Queens, leapfrogged in the westward expansion, will be included “very soon,” Winik said, while OurHarvest is also adding new pickup locations to service additional Long Island customers.

It’s a multifaceted strategy conceived by partners who tend to consider growth “from a couple different angles,” according to Winik.

“The first is continuing to expand our geographic coverage,” the cofounder said. “We have a lot of work to do to expand to different communities on Long Island and in New York City.

“We also have an opportunity to increase our customer spends and wallet shares,” Winik added. “If the average family spends $250 on groceries each week, we’re only turning 40 or 50 percent of that spend. The idea is to expand our wallet share.”

That means continuing to increase that product line, which stands around 420 total items and is climbing fast. Winik referenced the recent addition of artisan pickles from an East End maker and small-batch, hand-packed spices and blends by Long Island startup Crimson & Clove, with “a whole host of baked goods” – including several gluten-free selections – expected to be ready for customer delivery before fall.

Its local focus has also helped OurHarvest outlast some larger farm-to-table competitors, including Farmigo – a Brooklyn-based fresh-food distributor that grew too quickly, according to Winik, and now sells software it developed as part of its defunct delivery business – and Good Eggs, a San Francisco-based organic distributor that raised millions in VC but bit off more than it could chew when it expanded to New York.

The void left by those defeated distributors is a further boon to OurHarvest, Winik noted.

“Farmigo had pickup sites in different (Long Island) communities, and a lot of their organizers have been reaching out to us,” he said. “We’ve already launched a new site in Smithtown and we’ll be launching several more in the coming weeks.”

Meanwhile, those complete-meal donations keep piling up. OurHarvest’s gifts have benefited “a broad selection of charities,” according to Winik, who said the company donates directly to community food pantries and also to regional providers like Island Harvest and Long Island Cares, both based in Hauppauge, and the Huntington-based Family Service League of Long Island.

The idea is not to spread the OurHarvest brand, Winik noted, but to “create a sustainable food system, and part of that is helping the one person in seven out there who is food-insecure.”

“That’s why we left our careers,” he said. “To do something that makes a difference.”

With two years of expansion under their collective belt and their eyes on a first-ever fundraising round – Winik was mum, noting only some modest personal and family-and-friend investments to this point – the entrepreneurs feel like the difference-making is well underway.

“It’s one thing to have a theory about a business that can potentially help farmers, help consumers and help communities,” Winik said. “But to come to a point where we’re actually donated 10,000 meals, and realize we’ve helped farmers expand and we’ve helped so many consumers … it’s very rewarding.